6 Questions to Ask Before Downsizing
Thinking about downsizing? It’s exciting and overwhelming at the same time to think about. Think you are ready? Here are some important questions to ask before downsizing.
Where do you want to live?
This is one of the first things questions to ask before downsizing because so many things hang on it. Knowing where you want to live will help you answer the other questions.
We knew we wanted to eventually retire to the Phoenix area. (Read why we chose Phoenix.) We had been to Arizona several times on vacation and on college visits and fell in love with it. We had also experienced it during different times of the year – which is important because you don’t want to be surprised by how the area changes depending on the time of year (e.g. summer in Phoenix or a popular vacation destination in the off-season).
Once we made that decision, we made a point to look at different neighborhoods in the Phoenix area every time we traveled to Arizona. This was a great way to begin to understand what we like and didn’t like about the various areas and kinds of homes – not to mention it helped us become very familiar with the Phoenix area.
Having all of this leg work done made the decision so much easier because when the stars aligned, we were ready to jump. (Use this workbook for helping you think through everything related to choosing where you want to live.)
What is your job situation?
Are you planning to retire when you downsize? Or are you going to continue working? Will you be able to work from home? Are you planning on changing jobs? If you are changing jobs, what is the job market like where you want to live?
Our plan was to retire in 2-3 years. At the time, The Mister’s job was on-site, so our downsize plan wasn’t going to happen until he retired. And then came COVID. The Mister was suddenly working from home 100%. After a few months of remote work, he asked about working remotely from Phoenix – and was approved. Suddenly, that obstacle (the most important one) was removed.
What will be the financial impact?
This is one of the most important questions to ask before downsizing. It is directly tied to your job situation and where you plan to live. Things to consider are:
- Cost of living
- Moving expenses
- Lifestyle impact on your expenses
- Taxes
This is a great reality check. Meeting with a financial planner can help you figure out the specifics on the financial impact of the move.
When we were thinking through this, we looked at our current spending in Pennsylvania and then looked at every category in the Phoenix area. For example, gas is slightly higher in Phoenix, but we knew that wouldn’t be a factor because The Mister would be working from home. We also looked at taxes – and learned that living in Arizona would reduce our overall tax burden.
Another financial consideration are the moving expenses. Unless you are moving for your job, you’ll be paying for the move yourself. And it can get expensive. Expenses can include packing services, move-out/move-in, storage (if your new home isn’t ready when you get there), vehicle transportation, etc. Don’t skip over this category lightly. Do you research and go into this process with realistic expectations on what it will cost for you to move.
How is the current real estate market?
If you own a home, it is a good idea to stay in touch with what is happening in your local real estate market. Are homes in your area selling? Or is the market slow? Also what is your home worth? Knowing these things will help you decide when it is a good time to sell.
For us, selling our house wasn’t even on our radar. We had paid attention to the market in terms of our house and home where we lived, generally moved slow. During the summer of COVID, all of that changed and the market exploded. A house that was the same model as ours sold for much more than houses had been selling in the past. This is what clinched the deal for us. Having awareness of the past and current situation, helped us make the decision to sell our home.
What is your family situation?
Family considerations are also important because the family will be impacted by your decision to downsize. For example, are you raising a family? Or are you empty-nesters? What about aging parents? Do they depend on you? How will you help them make the adjustment? How often will you visit? How will you stay in touch with them?
We downsized right after we moved our daughter into college for her freshman year at Arizona State University. She is our only child and the house we were in was much too big for the two of us. What we didn’t anticipate was the impact it had on her. It took her a while to adjust to the idea that Pennsylvania was no longer “home”. Hosting our last Christmas at our old home before the sale was final, helped to create some memories and gave her the opportunity to say goodbye.
As for the rest of our family, everyone still lives in Pennsylvania and Delaware. Once we made our decision, we made a commitment to that we would make regular trips to see them. We also needed a way to “see” them so we gave our parents an Amazon Echo. It is a dedicated tool for making video calls to them. We chose it because it is fairly easy to use and it doesn’t require a computer. It’s a great way to stay in touch over the miles. There are lots of other options out there, but for our parents, this was the best choice.
are you ready?
There are so many things to think about. Carefully consider these questions to ask before downsizing to determine if it is the right time for you to make the move. Take your time – it isn’t something you want to rush through.
If you decide that you are ready, there will be a lot of things to take care of. This blog has lots of resources to make it easier. Subscribe to our newsletter so you don’t miss a thing!
